Initial public offerings return as stocks keep rallying
NEW YORK (AP) — Coming off its worst year in three decades, the market for initial public offerings is starting to show signs of life.
Eight companies are looking to raise as much as $3.7 billion when they go public next week, the most activity the U.S. IPO market has seen in a single week in nearly two years and a clear sign that Wall Street’s appetite for risk is returning.
IPOs all but dried up in 2008 as investors shunned the traditionally risky bets and moved into safer assets like cash and Treasurys as the stock market tumbled.
Only 43 companies completed IPOs in the U.S. last year, down from 272 the year before and 221 in 2006, according to Renaissance Capital’s IPOHome.com. It was the slowest year for IPOs since 1978.
The amount of money raised through IPOs last year sank 53 percent to $28 billion, but more than half of that came from just one offering. Without the mammoth $18 billion Visa Inc. IPO in March, the largest on record, last year’s total would have been a paltry $10 billion, far below the $59.7 billion raised in 2007.